President Donald Trump and Treasury Secretary Scott Bessent have been calling for aggressive rate cuts, but the Federal Reserve hit a pause and kept the federal funds rate unchanged last week.
FOMC Meet In March
All eyes will be on Fed Chair Jerome Powell at the next Federal Open Market Committee meeting on March 18, as markets anticipate a rate cut.
After rates were kept unchanged last week, Trump called for immediate rate cuts and he accused Powell of hurting the U.S. economy.
“He is hurting our Country, and its National Security,” Trump said.
Here’s What The Prediction Market Is Betting On
Data from Kalshi, a federally authorized betting platform, shows that over $3 million has been bet on the contract “Fed decision in March?”
Most bettors think that the rates will be kept steady. There is a 90% probability that the Fed will maintain the rate, up by 1%.
The bettors think there is a 9% probability that the rate will be cut by “25bps” and 2% think that the rate will be hiked by “25bps.
The CME Group’s FedWatch tool‘s projections show markets pricing a 91.1% likelihood of the Federal Reserve leaving the current interest rates unchanged in March.
Kevin Warsh May Cut Rates Faster
Trump‘s Fed Chair pick, Kevin Warsh, is expected to cut rates faster after he replaces Powell. According to Steven Major, global macro advisor at broker Tradition Dubai, said that there could be “four or five” rate cuts under Warsh.
Warsh will succeed Powell when his term ends in May 2026.
He earlier served on the Fed’s Board of Governors from 2006 to 2011.
Praising Warsh, Trump said he “will go down as one of the Great Fed Chairmen, maybe the best.”
Photo courtesy: MDart10 on Shutterstock.com
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